Understanding what drives the next generation: How Tech Companies can learn to embrace Gen Z and Gen Alpha

Human beings tend always to look back to the past when we want to see what’s coming in the future. As we get older, we may also become more set in our ways, less flexible and resistant to change. We may even look with envy at the next generation and all that they have, and want to be like these young, modern, handsome, “techies”.

They were born into the 21st Century – an era where having WiFi is at the base of their Maslow heirarchy of needs1 , an age where communication with your friends is ephemeral and takes place on an Internet server. They are the famous “Gen Z”, or those born between the years 1995-2010., or the so-called Gen Alpha, born in the second decade of this century. These are the younger siblings, or even children, of the famous “Millenials”, whom all the big companies have until now wanted to embrace.

If any of you has the privilege of having a child in either of these two younger age groups, you will probably be very interested in nding out more about what drives this new generation of tech consumers, and how it relates to your own experience with your children. Above all, it is important to recognise that your children are not “weird” and that, due to the impact of both scale and globalisation, their behaviour is typical of a very high percentage of the world’s younger population today.

They were born surrounded by digital mobile technology, a social network as a way of life and a preference for communicating visually, with images rather than words. But although they have grown up with a Smartphone within reach, they are not necessarily more technically advanced or computer literate than the two previous generational groups (X and Y (Millenials)). For example, according to market and brand research rm Kantar MillwardBrown , 3 out of every 4 new graduates in Spain already have had some type of computer training by the time they start their first job. So, what are the key features that differentiate Gen Z from their predecessors?

INSTANTANEITY

Firstly, Gen Z has a much shorter attention span (of 8 seconds versus 12) than the previous generation. Society has evolved towards what we could call “instantaneity”, that is, the value of the immediate. Start-ups are advised to be able to tell their business story in an “elevator pitch”, in no more than 10 minutes. Gen Z expects more and more personalisation and relevance of information, while valuing the instantaneous, the fast. The growing use of personalised stories on Instagram or Snapchat confirms this theory. The smartphones of our teenagers are full of little elaborate videos that convey moments, feelings, desires or anger about a part of their life that they share ephemerally with their network.

This revolution began in 2009 when Apple launched the iPhone 3GS with a built-in low-resolution video camera and made it available to millions of users. From then on, the growth of apps for photo editing or publishing content in real time on the Internet was exponential.

Today a young teen could earn a considerable salary directly proportional to the followers that they have if they use, for example, https://www.21buttons.com. This is a social network that allows its users to advertise clothes and other fashion accessories and receive a percentage of the purchase made by any of their followers in any of the brands that are sold.

The way new generations use, share and consume content is fresh, unprepared, and very real. For example, Everlane, which positions itself as an ethical and trustworthy clothing company, uses Snapchat to bring and customise their products to their customers in a completely new and transparent way: “without cameras, without editing, live. It’s beautiful and it’s the platform for the new generations.” This fascination with the real and the immediate could explain why sometimes we are surprised when our children are completely fascinated by a youtuber who is simply telling us that he has just got up, or what he is having for breakfast. This generation want doses of reality in abundance, they do not want fakery, they want to experience the real world. The two main passions of Gen Z in terms of creative content are music and humour. They expect well designed experiences coupled with an aesthetic sensibility.

This attitude is in stark contrast with earlier generations who have experienced the world in the opposite way, as part of the great theatre of TV, the media and the traditional marketing and branding of companies.

Young people today spend more time consuming media and internet than they do sleeping. Today the average number of digital devices used by each individual is 3.6.

A further differentiator for Gen Z is their preference for visual communications over voice. In 2013, 96% of adults made at least one voice call per week. This percentage has fallen to 75% in 2016. The reduction in the number of voice minutes and calls in the world is dramatic and has largely led to the commoditisation of voice calls and even SMSs, which were once the major revenue generators of the telcos. The new type of communication is visual. Almost two billion images are uploaded daily to the internet, Google alone has 13.7 Petabytes of information.

VALUES & PRIVACY

This newest generation genuinely values honesty and transparency much more than its predecessors. How much importance you place on your own privacy is increasingly seen as an important differentiator. There is an increasingly negative perception amongst this group towards advertising and how intrusive this may be. The use of adblockers is growing, suggesting that they have a low boredom threshold and are much less tolerant of intrusion, both online and on their mobile. This may be because they perceive the digital world as really their own space and having advertising there is even less welcome than for other generations.

Another characteristic of Gen Z is that they have “social conscience”: 60 percent want a job that impacts the world, 26 percent do some type of volunteering and 76 percent care about the impact that humans have on the planet.

They also believe in purposeful work. They were born with the DIY culture (Do it yourself), so they are accustomed to solving problems and needs in a personal and focused way. 76 percent of these young people want their working life to be directly related to their current passions and hobbies. 72 percent say they do not intend to receive orders from a boss, EVER. They are therefore willing to start up their own companies and be their own bosses.

CONCLUSIONS

In 2026, most consumers will be Millenials or Gen Z.

Society and companies will have to adapt quickly to the new type of consumer and business behaviour, which I would de ne as inherently technological. The business model and approach will have to change radically: companies will have to evolve their monolithic management model of the 1980s to a new model, which is more exible, agile and more uid and far less structured to attract this talent. We will have to learn how to make them fall in love with us to get them to buy our products and services. We will have to get to them on the Internet to be able to interest them and to let them trust us. The products we provide to them will need to be completely different, based on a mobile platform and more “as a service”. In short, we expect significant changes which, as always, will be led by these new generations.

Gema Estaban Garrido is a “Digital Executive” with Telefonica. She is an expert in breaking down silos. She has considerable experience in working with technology, understanding and spotting trends, and identifying consumer behaviours to adapt business strategy to new consumer needs. Gema has developed and grown an influential network to position Telefonica to compete effectively by finding solutions in a complex business environment.